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ESSENTIAL BEVERAGE HOLDINGS LIMITED
(INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA)
(REGISTRATION NUMBER : 1998/12633/06)
("ESSENTIAL")
DISPOSAL OF ESSENTIAL'S SUBSIDIARY COMPANIES
ACQUISITION OF INTERNET GAMING (PTY) LIMITED
CHANGE OF ESSENTIAL'S NAME AND NATURE OF BUSINESS
RECONSTITUTION OF ESSENTIAL'S BOARD OF DIRECTORS
ISSUE OF SHARES FOR CASH
NOTICE OF GENERAL MEETING
The Board of Directors of Essential is authorised to announce that further to
the cautionary announcements dated 4 September 2000 and on the 19 October 2000,
the following agreements have been concluded :-
1. DISPOSAL OF ESSENTIAL'S SUBSIDIARY COMPANIES
Essential has disposed of its entire shareholding in Essential Waters Limited
and Essential Waters (BVI) Limited to Palladio Inc at a price of R100.00 (one
hundred rand) with immediate effect. Palladio Inc shall assume all liabilities
in respect of Essential Waters Limited and Essential Waters (BVI) Limited and
Essential will write off its entire loan account to those companies. The Board
of Essential is satisfied that this is not a "related party" deal and that the
rules in respect thereof do not apply in this instance.
In terms of the agreement, Palladio Inc shall assume all risks in respect of
the liabilities of Essential Waters Limited and of Essential Waters (BVI)
Limited and those creditors in the approximate amount R4 500 000 (four million
five hundred thousand rand) have no claims of whatsoever nature against
Essential.
The business of Essential was the manufacture, bottling, distribution and
marketing of "Essential Waters"; a herbal and mineral enriched mineral water
drink. Essential's management failed to successfully launch the products and
the substantial costs involved in this process exhausted Essential's cash
resources. The Board of Essential was therefore obliged to enter into an
agreement to dispose of the subsidiary companies and to acquire Internet Gaming
(Pty) Limited in order to rescue Essential from liquidation and thereby protect
the interests of Essential shareholders.
2. ACQUISITION OF INTERNET GAMING (PTY) LIMITED
Essential has acquired the entire shareholding and shareholder loan accounts in
and to Internet Gaming (Pty) Limited from the below-mentioned vendors :-
80% from the Internet Gaming Corporation Limited (Listed on the JSE Securities
Exchange South Africa as "Igaming"); and
20% from Vegas International SA
(hereinafter collectively referred to as "the vendors")
The purchase price payable to the vendors shall be in the amount of R92 500
000.00 (ninety two million five hundred thousand rand) and payable to the
vendors through the issue of 925 000 000 (nine hundred and twenty five million)
Essential shares at a price of 10 (ten) cents per Essential share. The
effective date of this transaction shall be from the date of the approval of
Essential shareholders in General Meeting.
3. CHANGE OF ESSENTIAL'S NAME AND NATURE OF BUSINESS
An application will be made to the JSE Securities Exchange South Africa to
approve Essential's name to be changed to that of Internet Casinos Limited and
its nature of business to be that of an Investment Holding Company with its
subsidiary conducting the business of operating Internet Casinos for its own
benefit.
Internet Gaming (Pty) Limited operates Internet Casinos with software purchased
from TIGC Management Services (Pty) Limited ("TIGC"), a subsidiary company of
The Internet Gaming Corporation Limited, listed on the JSE Securities Exchange
as "Igaming". Internet Gaming (Pty) Limited pays a fixed percentage of its
gross gaming winnings as a royalty to TIGC in perpetuity. Internet Gaming (Pty)
Limited operates its Internet Casinos via an agreement with Oceana Data
Processing Limited, a licensed Internet Casino operator incorporated in Belize,
that company being associated with Igaming.
4. RECONSTITUTION OF ESSENTIAL'S BOARD OF DIRECTORS
Essential's Board of Directors has been reconstituted with immediate effect and
is now as follows :-
Mr S R Schonfeldt (Non Executive Chairman), Mr R W (Bill) Gresty (Managing
Director), Mr A Santini (Executive Director), Mr K G Metcalf (Non Executive
Director).
Mr C E P Colombotti, Mr R M Axtell, Mr I B McLean, Mr J Pierce, Mr A Gierdien,
Mr M A Weston and Mrs M M Lenaghan have all resigned as directors of Essential.
5. ISSUE OF SHARES FOR CASH
Essential intends to issue the amount of 20 000 000 (twenty million) additional
shares for cash at a price of 3 (three) cents per share in order to settle
Essential's creditors. This will effect the rescue of Essential and prevent the
liquidation of Essential. It is intended that these shares will be issued at
the date of the General Meeting of Essential shareholders. These shares are
being issued to various investors introduced by Igaming.
6. FINANCIAL EFFECTS UPON ESSENTIAL
The financial effects upon Essential's Net Asset Value ("NAV") and Earning per
Share ("EPS") are as follows :-
UNAUDITED PROFORMA % CHANGES
9 MONTHS 9 MONTHS
31 JULY 31 JULY
2000 2000
EPS (cents) (4.67) (0.25) + 94.65
NAV (cents) 10.53 9.46 - 10.00
Number of Issued Shares ('000) 173 345 1 118 345 + 645
The Proforma EPS and NAV per share reflect the effects after the approval of
the transactions set out in this announcement, on the assumption that all of
the transactions had been effective as at 31 July 2000.
The assumptions utilised to calculate the proforma figures are as follows :-
- the disposal of Essential Waters Limited and Essential Waters (BVI) Limited
for R100.00; and
- the write off the loan accounts to Essential Waters Limited and Essential
Waters (BVI) Limited; and
- the acquisition of Internet Gaming (Pty) Limited for R92 500 000.00 (ninety
two million five hundred thousand rand); and
- the issue of 925 000 000 (nine hundred and twenty five million) Essential
shares as consideration for the purchase of Internet Gaming (Pty) Limited; and
- the issue of 20 000 000 (twenty million) Essential shares for cash.
7. REGULATORY AND SHAREHOLDER APPROVAL
These proposals are subject to the approval of :-
7.1 The JSE Securities Exchange South Africa; and
7.2 The Securities Regulation Panel ("SRP"); and
7.3 The requisite majority of Essential shareholders in General Meeting.
Due to a change of control in Essent, a formal application for a waiver of the
standby offer to minorities will be made to the SRP in terms of rule 8.7 of the
code.
Shareholders are advised that the agreements forming the basis of these
transactions are subject to the Listings Committee of the JSE Securities
Exchange South Africa approving the new nature of Essential's business and the
continuation of Essential's listing on the JSE Securities Exchange South Africa
8. NOTICE OF GENERAL MEETING
A General Meeting of Essential shareholders will be held in the Boardroom at
Incentive House, 170 Oxford Road, Melrose, Gauteng at 11h00 on Thursday 22
March 2001 in order to ratify these transactions. A circular will be posted to
Essential shareholders within the required period of time.
It is intended that the Annual Financial Statements for the year ended 31
October 2000 be approved at that Meeting.
JOHANNESBURG, 13 FEBRUARY 2001
Sponsoring Brokers to Essential
INCENTIVE SECURITIES (PTY) LIMITED
(Registration Number : 98/21556/07)
Corporate Advisors
BRAND CORPORATE ADVISORS (PTY) LIMITED
(Registration Number : 99/22753/07)
Attorneys
MICHAELIDES
United Kingdom Solicitors
AMHURST BROWN COLOMBOTTI
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